Elon Musk testifies in defense of Tesla buyout tweets

On Friday, Elon Musk came forward as a witness to defend a 2018 tweet alleging he arranged funding to take Tesla private in a deal that never came close to happening.

A tweet in which Musk claimed he was “funded” led to a $40 million settlement with securities regulators. It also led to a class action lawsuit alleging that he misled investors, leading to a lawsuit on Friday.

The fickle billionaire testified in a dark suit on the third day of a San Francisco civil trial that his lawyer unsuccessfully tried to move to Texas, where Tesla is now headquartered, on the grounds that media coverage of its tumultuous takeover by Twitter messed up the composition. jurors.

A nine-member jury meeting earlier this week will be responsible for deciding whether a pair of tweets posted by Musk on August 7, 2018 caused damage to Tesla shareholders over a 10-day period, after which Musk admitted that the buyout. which he envisioned was not carried out. should happen.

A month later, Musk stepped down as chairman of Tesla, remaining CEO as part of the Securities and Exchange Commission settlement without admitting any wrongdoing.

In the first of these two 2018 tweets, Musk stated that he had “funding secured” for what would have been a $72 billion Tesla buyout at a time when the electric car maker was still struggling with manufacturing issues and costing a lot less than it does now. A few hours later, Musk responded: another tweet suggested that a deal was inevitable.

Elon Musk to face trial over 2018 tweets about Tesla shutting down 04:38

“I care a lot”

On Friday’s booth, Musk, who last year bought Twitter for $44 billion, said tweets are “the most democratic way” to communicate with investors.

“I care a lot about retail investors,” he said when questioned by shareholder lawyer Nicholas Porritt.

But he acknowledged that investors could get more details in traditional corporate filings with securities regulators, given Twitter’s character limits.

“I think you can be absolutely truthful on Twitter,” Musk said. “But can you be all-encompassing? Of course not”.

Even before Musk took the stand, U.S. District Judge Edward Chen said the jury could dismiss the two tweets as lies, leaving it up to them to decide whether Musk intentionally defrauded investors and saddled their claims with losses.

Musk has previously claimed that he entered into the SEC settlement under duress and claimed that he believed he blocked financial support for a Tesla buyout during meetings with representatives of the Saudi Arabian Public Investment Fund.

new focus

The lawsuit over his Tesla tweets came at a time when he was focusing on Twitter, which he acquired in October for $44 billion after trying to back out of that purchase.

Musk’s lead on Twitter, where he gutted staff and alienated advertisers, has proved unpopular with current Tesla shareholders, who are concerned that he is devoting less time to running the automaker at a time of increased competition. Those fears contributed to a 65% drop in Tesla stock last year that wiped out more than $700 billion of shareholder wealth — far more than the $14 billion fortune swing that occurred between the company’s high and low share prices between Aug. 7 and Aug. 17. . , 2018, covered by a class action lawsuit.

Since then, Tesla shares have split twice, bringing the $420 buyback price quoted in his 2018 tweet to $28 on an adjusted basis. The company’s shares traded around $133 on Friday, down from the company’s November 2021 peak of $414.50.

After Musk dropped the idea of ​​a Tesla buyout, the company overcame its manufacturing problems, leading to a rapid increase in car sales, causing its stock to skyrocket and making Musk the richest man in the world until he bought Twitter. Musk has slipped from number one on the wealth list following the stock market’s backlash against his Twitter handle.

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